The remodel underway at The Ranch, the former Aliso Creek Inn hotel and restaurant in Aliso Canyon, is being challenged as unlawful in a hearing before the California Coastal Commission Wednesday, July 9, in Ventura.

If the commission follows the recommendation of its staff, the project would be subject to a de novo review by the commission, meaning the entire project would be considered as if for the first time, without deference to the permits approved in recent months by the Laguna Beach Planning Commission. Such a scenario could delay the makeover begun on the 84-acre property sometimes described as Laguna’s Yosemite.

While golfers continue to swing on the nine-hole course, hotel guests were turned away beginning late last year as carports were dismantled and the 64 guest apartments stripped to the studs. On May 14, permits were approved for reconfiguring the hotel into 97 rooms, adding a new spa, revamping the restaurant and a valet parking arrangement.

Local resident Mark Fudge appealed the local decision to the commission on June 16, claiming that the city of Laguna Beach unlawfully approved the project and granted permits to owner Mark Christy “he had no reasonable expectation of receiving.”

The appeal cites eight areas in the project – ranging from the lack of an environmental review to remodeling of non-conforming buildings — that Fudge alleges are inconsistent with the city’s local coastal plan, comprised of adopted policies that govern land use.

In its report, the Coastal Commission staff, too, criticizes the city of Laguna Beach for inconsistencies in its approval process and says Fudge’s appeal raises “a substantial issue” over whether the city is complying with the regulations and standards of the state Coastal Act, which sets development limits within natural and scenic resource areas.

“I think we did our job reviewing the project,” the city’s planning manager, Ann Larson said, noting that the project was submitted last fall and in the interim was reviewed by city staff for compliance with various codes, including environmental ones.

A rebuttal is being prepared to correct inaccuracies in the coastal staff’s analysis of the city’s actions, Larson said.

“Frustrating as this incredibly costly and unnecessary delay is, it really is a shame for the visitors who are anxious for us to open and for the 100 or more people we were planning to hire,” said Christy, who acquired the aging property first developed in the 1940s with two partners last year. The sellers shelved a more ambitious redevelopment of the hotel amid the recession.

Fudge was the only dissenter at the May 14 hearing where Christy’s Laguna Beach Golf and Bungalow Village LLC was granted coastal development and conditional use permits for subdividing rooms, a new spa and reworking of the restaurant at The Ranch. At the time, Fudge questioned why the project was granted an environmental review exemption, but he did not pursue the matter locally with an appeal of the decision to the City Council.

“That would be the more typical route,” said Robert Zur Schmiede, the Planning Commission chair, who noted that aside from the environmental point, Fudge’s testimony failed to mention other criticisms included in the appeal to the commission. “It’s difficult to address when they are not brought up in a public hearing,” he said.

In a brief phone conversation, Fudge declined to answer any questions about his motivation in challenging the project. In his appeal, though, Fudge says he felt his voice went unheard and that he hopes to find a more receptive and responsive audience to his pleas with the commission.

Some think more is at play. Fudge owns the historic Halliburton House, which overlooks Aliso Canyon from its southern ridgeline perch. He paid $3.6 million in 2011 for the all-concrete structure built in 1936 and is at work on its restoration.

Plans to develop vacant land near the house were halted as a result of a challenge in August 2011 by the South Laguna Civic Assoc. over development’s impact on a structure eligible for the National Register of Historic Places. Fudge’s effort to halt development of The Ranch tries to establish that Laguna Beach is approving projects without proper environmental scrutiny to pre-emptively ensure that future projects near his own house also do not evade review, said a knowledgeable source, who declined to be identified.

For his part, Christy, a local resident who co-owns Hobie surf shops and La Sirena restaurants, looks past the procedural questions raised by the appeal. “Based on my lifelong personal connection with this place, I know that what we’re doing is the best possible scenario for this property, the environment and for the people and town of Laguna,” said Christy, who settled on the new name to evoke an earlier era when Aliso Canyon was home to the Thurston ranch, one of the town’s homestead families who farmed melons and nuts in the canyon bottom in the 1890s. “I have nothing but respect for the natural setting, it’s heritage and am certain that we’re good stewards doing the right thing on every level.”